Savings and stocks

Michael Pollak mpollak at
Sun Feb 21 22:25:08 PST 1999

I have another dumb question. Why is putting your money in a 401(k) in the stock market not considered "savings" when the national savings level is considered? There has been much moaning of late that consumer savings went to 0.5% for 1998 and negative for the last few months, and the explanation is always the same, that people feel so chuffed from having their stocks jump in value that they're spending like sailors.

But I don't understand. If a chap like me, who used to have $500 in his savings account, now has 50 grand in his 401(k), my savings have gone down? And if the economy is filled with 40 year olds like me, is the sudden virtue of our self-tithing leading the savings rate to go down even as we think of ourselves as socking it away? (Especially if the strain of stashing away 10% or more of our salaries causes our credit card balances to increase by huge percentages that seem small in absolute terms compared to our huge mountains of virtue?)

Michael __________________________________________________________________________ Michael Pollak................New York City..............mpollak at

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